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Note 6 - Leases

12 Months Ended

Dec. 31, 2021

We currently lease approximately 25,600 square feet of office space for general and administrative purposes in Houston, Texas under a lease agreement that expires on December 31, 2022.

On March 6, 2019, Rio Grande entered into a lease agreement (the “Rio Grande Site Lease”) with the Brownsville Navigation District of Cameron County, Texas (“BND”) pursuant to which it has agreed to lease approximately 984 acres of land situated in Brownsville, Cameron County, Texas for the purposes of constructing, operating, and maintaining the Terminal and gas treatment and gas pipeline facilities.

The initial term of the Rio Grande Site Lease is for 30 years (the “Primary Term”), which will commence on the date specified in a written notice by Rio Grande to BND (the “Effective Date Notice”), if given, confirming that Rio Grande or a Rio Grande affiliate has made a positive FID for the first phase of the Terminal. Under the Rio Grande Site Lease, the Effective Date Notice was to be delivered no later than November 6, 2019 (the “Outside Effective Date”) unless Rio Grande was unable to deliver the Effective Date Notice prior to the Outside Effective Date due to reasons unrelated to its own acts or omissions or its inability to secure one or more of the required permits for the Terminal. In such a case, the Outside Effective Date would be automatically extended on a month-to-month basis (the “Effective Date Notice Extension Period”). Rio Grande has the option to renew and extend the term of the Rio Grande Site Lease beyond the Primary Term for up to two consecutive renewal periods of ten years each provided that Rio Grande has not caused an event of default under the Rio Grande Site Lease.

On April 30, 2020, Rio Grande and the BND amended the Rio Grande Site Lease (the “Rio Grande Site Lease Amendment”) to extend the effective date for commencing the Rio Grande Site Lease to May 6, 2021 (the “Effective Date”). The Rio Grande Site Lease Amendment further provides that Rio Grande has the right, exercisable in its sole discretion, to extend the Effective Date to May 6, 2022 by providing the BND with written notice of its election no later than the close of business on the Effective Date. On April 28, 2021, Rio Grande delivered a notice to BND electing to extend the Effective Date of the Rio Grande Site Lease Amendment to May 6, 2022.

Operating lease right-of-use assets are as follows (in thousands):

		*December 31,*		*December 31,*
		*2021*		*2020*
Office leases	$	590	$	429
Land leases		—		—
Total operating lease right-of-use assets, net	$	590	$	429

Operating lease liabilities are as follows (in thousands):

		*December 31,*		*December 31,*
		*2021*		*2020*
Office leases	$	596	$	432
Land leases		—		—
Total current lease liabilities		596		432
Non-current office leases		—		—
Non-current land leases		—		—
Total lease liabilities	$	596	$	432

Operating lease expense is as follows (in thousands):

		*December 31,*		*December 31,*
		*2021*		*2020*
Office leases	$	627	$	829
Land leases		—		446
Total operating lease expense		627		1,275
Short-term lease expense		278		319
Land option expense		—		9
Total land option and lease expense	$	905	$	1,603

Maturity of operating lease liabilities as of December 31, 2021 are as follows (in thousands):

2022	$	633
2023		—
2024		—
2025		—
2026		—
Thereafter		—
Total undiscounted lease payments		633
Discount to present value		(37	)
Present value of lease liabilities	$	596

Other information related to our operating leases as of December 31, 2021 is as follows (in thousands):

		*December 31,*		*December 31,*
		*2021*		*2020*
Cash paid for amounts included in the measurement of operating lease liabilities:
Cash flows from operating activities	$	624	$	1,004
Noncash right-of-use assets recorded for operating lease liabilities:
In exchange for new operating lease liabilities during the period		712		605